Saudi and Foreign investors stand in front of the logo of Saudi state oil giant Aramco during the 10th Global Competitiveness Forum on January 25, 2016, in the capital Riyadh. Saudi Aramco is preparing a global public offering that could be the...

The giant going public is Saudi Aramco, the national oil company of Saudi Arabia. It is expected to have a $2 trillion value, more valuable that
ExxonMobil,
Apple or
Alibaba. This week Aramco named
J.P. Morgan,
Morgan Stanley and HSBC as the lucky underwriters for its offering.

It is unclear where shares will be listed though New York has been rumored. Regardless, investors may have to wait another year, or two, before Aramco is ready to go public.

J.P. Morgan (Aramco’s longtime commercial banker) and Michael Klein (formerly of Citigroup) have been advising Aramco on the financial restructuring that is necessary for the process. Boutique investment firm Moelis was recentlyselected as the independent advisor for the IPO, and J.P. Morgan, Morgan Stanley and HSBC were recently named as underwriters for the IPO.

Initially, the IPO was expected to take place in early 2018, but the expected date has since been pushed off to late 2018 or early 2019. This is likely due to Aramco’s desire to complete the financial restructuring process to make the company more attractive to investors.

Aramco plans to offer shares on the Saudi stock exchange, called Tadawul. Recent rumors hint that it is also considering several western exchanges: New York, London and Toronto.

Visitors stand and watch stock movements displayed on large video screens inside the Saudi Stock Exchange, also known as the Tadawul All Share Index in Riyadh, Saudi Arabia, on Monday, Nov.28, 2016. (Simon Dawson/Bloomberg

There are some concerns that Aramco will not meet the strict standards for an oil company to list on the NYSE. SEC regulations would likely compel the company to divulge information about Saudi Arabia’s oil reserves that the Saudis consider national security secrets.

What effect will the IPO have on oil markets?

Investors will be looking most closely at a set date for the IPO. Markets expect Aramco, through Saudi Arabia and OPEC, will seek to increase the price of oil before the IPO to increase the proceeds from the IPO. This is because Saudi Arabia is the single most powerful country in OPEC.

What’s the history of Aramco and how did it get so big?

Aramco was originally an American company. The company was originally founded by Standard Oil of California (now
Chevron) and originally named the California Arabian Standard Oil Company (CASOC). It secured a concession from the King of Saudi Arabia in 1933 to look for oil. The company discovered oil in 1938 on Saudi Arabia’s eastern coast. By 1948, it had been renamed the Arabian American Oil Company (Aramco) and was co-owned by Standard Oil of California, Texaco, Standard Oil of New Jersey (now ExxonMobil) and Standard Oil of New York.

Unlike other national oil companies in the Middle East and Latin America, the Saudis did not nationalize the company by force or fiat. Starting in 1972, the Saudi government began purchasing shares of the American-owned Aramco until, in 1980, it acquired the entire company. Aramco remained an American company until 1988, when the Saudis formally transferred ownership to Saudi Arabia and renamed the company Saudi Aramco. For practical purposes, this legacy means that Aramco has retained much of the managerial structure and operational habits of its American past.

A picture taken on May 10, 2016 shows over Shaybah, the base for Saudi Aramco's Natural Gas Liquids plant and oil production in the surrounding Shaybah field in Saudi Arabia's remote Empty quarter desert close to the United Arab Emirates, on May 10,...

Aramco currently has a production capacity of 12 million barrels of oil per day and rights to at least 260 billion barrels of recoverable oil owned by Saudi Arabia.